Kenya’s Copia mulls shutdown amid plans to lay off over 1,000 staff

Copia Global, a Kenyan B2C e-commerce startup that has raised $123 million in venture funding across seven rounds, is considering laying off employees or shutting down, citing “uncertainties.”

The layoffs, which could affect over 1,000 employees, would be a drastic cost-cutting measure for a company that announced an extension of its Series C round in December 2023.

”It is important to highlight that uncertainties lie ahead. As a result, it is very likely that there will be a reduction in our workforce and it is possible that the payment of salaries could be at risk,” said Tim Steel, Copia’s CEO, in an internal memo seen by TechCabal.

Steel added that laying off employees would be the first course of action to rein in costs. Should that fail, the company could shut down, joining other Kenyan e-commerce startups that have closed shop since the COVID-19 pandemic, like Wefarm, an agritech startup connecting farmers to farm input distributors, and Zumi, a B2B connecting retailers to suppliers.

While the startups have blamed funding drought and tough market conditions for their woes, experts suggest that the viability of the business models, absence of industry data to inform expansion, poor infrastructure, and customer trust deficit could be among the factors causing the closures.

“The company is required, in compliance with the law, to give all staff one (1) month notice of potential redundancies and to undertake a one (1) month consultancy period with all potentially impacted staff. Therefore, all staff are receiving this notice. A notice will also be given to the Labour Officer as required by law,” Steel said.

Copia is one of Kenya’s most well-funded startups. It announced a $50 million Series C funding round in 2022 and a $20 million extension of the same round in December 2023.

Despite Copia claiming that it had “cracked the nut of last-mile delivery” and built a fulfilment system for customers in remote parts of the country, signs of strain became obvious in 2023 when it laid off over 700 employees and closed Uganda operations barely two years into the market.

With an economic downturn and tight capital markets, Copia embraced a strategy of optimising operations to maximise its existing resources. This included a 25% workforce reduction that affected 350 employees.

In July 2023, Copia told TechCabal that it planned to remain profitable and better serve customers through streamlined processes and cost reduction. It suspended plans to expand to other African markets, including Nigeria, Ghana, South Africa, and Mozambique, citing the need “to accelerate Copia’s drive to profitability.

Copia was founded by Tracy Turner and Jonathan Lewis in 2013 to allow customers in remote areas to order goods through its platform and delivered to them through its network of agents.